After 2022, large real-estate deals driven by US private equity firms became more difficult in Europe, partly due to a sudden paucity of debt funding from investment banks. Smaller deals were sometimes easier as capital continued to flow relatively freely in some continental European banks.
Now, larger investment bank-led financings could be primed for a comeback in parts of the market – even while more traditional real-estate lenders in countries such as Germany and the US are experiencing problems – thanks to greater confidence in the availability of loan-on-loan funding for jumbo deals.
Loan-on-loan funding, in which banks take the senior tranche of a whole loan arranged by a real-estate debt fund, became more important in Europe in the latter part of the last decade, tying into the wider growth in importance of non-bank lenders on the continent.
Now the debt funds are in many cases becoming even more important in this sector...
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